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EU wheat off 2-month high as crop data, Black Sea supply in focus

EU wheat off 2-month high as crop data, Black Sea supply in focus

Reuters · 09/13/2022 12:50
EU wheat off 2-month high as crop data, Black Sea supply in focus

- European wheat futures pared gains on Tuesday after an earlier two-month peak as the market assessed reduced forecasts for maize crops and uncertainty over a Ukrainian export corridor.

December milling wheat BL2Z2 on Paris-based Euronext settled up 0.2% at 336.25 euros ($336.01) a tonne.

It earlier climbed to 340.75 euros, its highest since July 12, supported by a slide in the euro against the dollar and a further rally for Chicago grains.

Chart resistance at the 340 euro level and a stalling in the U.S. rally later curbed gains on Euronext, dealers said.

Grain futures had risen after Monday's U.S. Department of Agriculture (USDA) world crop report projected U.S. corn and soybean supplies would fall to multi-year lows following hot, dry crop weather.

France's farm ministry, meanwhile, on Tuesday cut its forecast for the country's drought-hit maize (corn) crop to a 32-year low of 11.3 million tonnes, though the outlook remained above market estimates closer to 10 million tonnes.

Reduced maize supply could increase demand for wheat in livestock feed and offset improving expectations for global wheat production. WASDE13

Cereal markets continued to be underpinned by Russian criticism of a diplomatic deal that has allowed maritime grain shipments to resume from war-torn Ukraine.

Traders are awaiting a meeting between Russian President Vladimir Putin and Turkish counterpart Tayyip Erdogan, who has also expressed reservations over the working of the corridor deal, later this week.

The United Nations is pushing Russia and Ukraine to agree to an ammonia gas deal that could stabilise the grain corridor deal, a Western diplomat said.

Export premiums on the French market have fallen since last week, reflecting competition from cheaper Russian supplies, traders said. WHEAT/RTR

However, brisk early-season sales to countries including China and Egypt are expected to maintain an active export loading programme in France in the coming months. GRAIN/SHP/FR

($1 = 1.0007 euros)

(Reporting by Gus Trompiz
Editing by Mark Potter)

((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.))